Boeing to cut 4,500 jobs

Boeing will lay off an unspecified number of workers in its Commercial Airplane division in the Puget Sound area beginning in the second quarter, the company announced this morning.

The layoffs are expected to be part of a 4,500-employee reduction in employment at the division that produces and designs commercial airliners.

Much of those reductions will occur as a result of attrition or the reduction of contract workers, but some layoffs will be necessary to reach the company's goal of 63,500 in the Commercial Airplanes division. That's about the same amount the division employed at the beginning of last year.

"We are taking prudent actions to make sure Boeing remains well positioned in today's difficult economic environment," said Scott Carson, president and CEO of Boeing Commercial Airplanes.

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"We have made significant strides in recent years to achieve greater efficiency and productivity, but we still face challenges that we must address," Carson said.

"We regret the disruption to those affected by this decision, but we believe that acting now will allow us to be in a financial position to adapt to market uncertainties, meet our customer commitments, continue investing in our current and future product lines, and protect our competitiveness in a fiercely competitive business environment."

The airline industry is suffering from the side effects of the worldwide recession. Passenger travel and freight volumes are declining, and financial losses are piling up.

While Boeing saw only a handful of cancellations in its 3,700-order backlog last year, more cancellations and order deferments are expected in 2009.

Chinese airlines, among Boeing's major customers, have been told by the government to defer deliveries and to freeze new orders. In India, several emerging carriers are in financial trouble.

Carson said the force reductions will be concentrated outside the production and development areas of the company to ensure that planes are delivered on time.

Boeing's Washington employment has been drifting downward since the end of October. So far, the company here has pared away more than 400 jobs.

Workers affected by the layoffs will receive 60-day notifications beginning in late February, the company said.

The company is expected to pay laid off workers severance pay and provide access to health insurance.